Though the new territory never yielded the fabled riches of the
mythical El Dorado, the fertile lands provided sufficient wealth
for those Spanish who chose to take advantage. The
encomienda system was established and haciendas developed,
producing balsam and cocoa for export (this latter proved to be a
particular source of wealth, with an ever-increasing demand for the
delicacy from Europe). Cattle were also introduced and flourished -
the indigenous farming method of slash and burn had created fertile
pastures for grazing - providing a firm source of food and
income.
As across Latin America, the impact of the Spanish arrival was
catastrophic for the indigenous inhabitants. Susceptible to
European diseases, cut off from food sources as lands were enclosed
by the encomenderos , forced into a different system of
beliefs, the indigenous population of El Salvador went into
freefall. By the end of the sixteenth century at least half had
perished. The Lencas and other groups living east of the Río Lenca
- considered by the Spanish to be more primitive and less malleable
than the Pipils in the west - were particularly badly affected.
The decline in the indigenous population left the Spanish
encomenderos with insufficient labour to work the land. In
the early years of the seventeenth century black slaves were
imported, though this came to a halt in 1625 when two thousand
slaves gathered in the centre of San Salvador during Semana Santa,
apparently to foment rebellion. The plans came to nothing, but the
slaves were henceforth considered too dangerous to use. Thereafter,
the encomienda system was gradually abandoned, largely
replaced by the end of the seventeenth century with a system of
peonage . Work on the haciendas was rewarded by payment in
vouchers, redeemable only in the hacienda shop, whose prices were
set significantly higher than in the open market. Money for daily
expenses, however, was advanced by the landowner, creating over
time a debt that the worker, or "peon", was unable to repay and
which, moreover, devolved upon his family and heirs.
Haciendas became enclosed, self-sufficient worlds; the workers
found all their needs provided for, but in return became reliant
upon the landowner for everything and unable to leave. Workers
could get ahead by serving their patron in all areas, legal or
illegal, while he in turn boosted his power by commanding such
resources. Such patterns were to continue in El Salvadorean society
in later years - not least in the private armies, raised by
landowners, that developed into the death squads of the 1970s and
1980s.
From the early eighteenth century, landowners switched from the
production of cocoa to that of añil ( indigo ).
Although long cultivated, it was not until protection measures in
the European markets were removed that it became viable to produce
the crop on a large scale. Growing demand for the superior dye
produced in Latin America ensured that by the mid-1700s indigo had
become the primary export crop. The principal beneficiaries of this
were - despite the efforts of the Spanish Crown to ensure
small-scale production - the hacienda owners and
comerciantes , the middle-men handling the sale and shipping
of the crop.
By the end of the eighteenth century El Salvador was a rigidly
stratified society, whose European elite consisted of the small
number of Spanish-born Crown functionaries and priests and a few
hundred Creole (Latin American-born) hacienda owners and
comerciantes ; these last two groups were allocated some
responsibility in the management of local affairs on behalf of the
Crown. Of available agricultural land, around half was held in
private haciendas. The vast majority of the population, mestizo and
indigenous, existed at subsistence level, cultivating maize.